Management Principles

& Concepts
Module 5
Business Ethics, Individual Focus

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 Learning Objectives – Business Ethics (Module 5):
- Chapter 3, “Developing Your Values-Based Leadership Skills”
- Alternate Text Chapter 1, 11 “Why Ethics Matter
- Giving Voice to Values Model
1. Explain why ethics is relevant to principles of management (chap 3).
2. Apply a decision framework for ethical decision making (chap 3).
3. Describe the role of ethics in a business environment (chap 1.1).
4. Explain the relationship between an organization’s approach to ethics and its stakeholders (chap 1.1)
5. Explain what it means to be a professional of integrity (chap 1.1)
6. Distinguish between ethical and legal responsibilities (chap 1.1).
7. Describe three approaches for examining the ethical nature of a decision (chap 1.1).
8. Differentiate between short term and long term perspective (chap 1.2).
9. Describe the relationship between ethical behavior, goodwill and profit (chap 1.2)
10. Explain the importance of business ethics in an evolving environment (chap 11.1, 11.2).
11. Identify values and incorporate into personal mission statement (chap 11.3, 11.4).
12. Consider enablers that can help you voice your values (Giving Voice to Values Model)
CBA BBA Learning Goal - Professional Development: Students will identify ethical dilemmas and address them.
• Recognize ethical issues in business
• Consider the consequences of business decisions on all stakeholders.

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 Chapter 3: Ethical Dilemmas arise from various
areas

• Advertising (desire to present your product or service in the best light)

• Sourcing of raw materials (does the company buy from a supplier who may
be underpaying their people or damaging the environment?)
• Privacy (should the company have access to private e-mails that employees
write on company time? or the Web sites they visit during work hours?)
• Safety (employee and community)
• Pay scales (relation of the pay of top executives to the rest of the company)
• Product pricing policies (variable pricing, discounts)
• Communication (with stockholders, announcements of plant closings, etc.)
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 Ethical Dilemmas, Options

• Situation, problem, opportunity

• You must choose
• Evaluate the outcome

You have options:

1. Live with it
2. Confront the person
3. Confront the person’s supervisor
4. Leave the situation

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 Main reasons for lapses in ethics
(American Management Association)

1. Pressure to meet unrealistic business objectives/deadlines.

2. A desire to further one’s career.
3. A desire to protect one’s livelihood. 1

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 Importance of Ethics in Management

1. Ethical leaders build trust.

2. Ethical leaders set the example.
3. Ethical leaders uphold values & standards (Corporate Code
of Conduct).
4. Ethical decision making (choices may not be compatible)

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 Steps in an Ethical Decision-Making Process
1. Assess the situation: What are you being asked to do? Is it illegal? Is it
unethical? Who might be harmed?
2. Identify the stakeholders and consider the situation from their point of
view.
3. Consider the alternatives that are available to you and how they affect
the stakeholders.
4. How does the action make you feel about yourself? (consequences,
duties/rights/principles, implications for personal integrity and
character)
5. Make a decision. (may involve others)
6. Monitor outcomes. (how did the decision work out for all concerned?)

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 Alternate Business Ethics Textbook Text Chapter 1:
Role of Ethics in a Business Environment

• Ethics – standards of
behavior you choose to
uphold.
• Stakeholders matter
• Business Ethics – guides the
conduct of companies

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 Reasons to Have Values-Driven Management
Source: Link to Learning on page 9 “Why Ethics Matter”.

• Diversity
• Globalization
• Cost pressures
• Virtual work
• Strategic alliances
• Teamwork
• Entrepreneurship and intrapreneurship
• Deregulated government
• Competitive, 24-hour media
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 Legal vs. Ethical Compliance
• Compliance
• Traditional codes of ethics (e.g. medical and legal profession)
• Legal may still be unethical
• Read the Johnson & Johnson “Our Credo” document. (See Link to Learning
on page 11 and on next slide.)
• Class practice:
• Identify stakeholders
• Choose five examples noted in the Credo of J&J going beyond their “legal”
responsibilities.

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 Our Credo – Johnson & Johnson
We believe our first responsibility is to the patients, doctors and nurses, to mothers and fathers and all others who use
our products and services. In meeting their needs everything we do must be of high quality. We must constantly strive to
provide value, reduce our costs and maintain reasonable prices. Customers' orders must be serviced promptly and
accurately. Our business partners must have an opportunity to make a fair profit.

We are responsible to our employees who work with us throughout the world. We must provide an inclusive work
environment where each person must be considered as an individual. We must respect their diversity and dignity and
recognize their merit. They must have a sense of security, fulfillment and purpose in their jobs. Compensation must be
fair and adequate and working conditions clean, orderly and safe. We must support the health and well-being of our
employees and help them fulfill their family and other personal responsibilities. Employees must feel free to make
suggestions and complaints. There must be equal opportunity for employment, development and advancement for
those qualified. We must provide highly capable leaders and their actions must be just and ethical.

We are responsible to the communities in which we live and work and to the world community as well. We must help
people be healthier by supporting better access and care in more places around the world. We must be good citizens —
support good works and charities, better health and education, and bear our fair share of taxes. We must maintain in
good order the property we are privileged to use, protecting the environment and natural resources.

Our final responsibility is to our stockholders. Business must make a sound profit. We must experiment with new ideas.
Research must be carried on, innovative programs developed, investments made for the future and mistakes paid for.
New equipment must be purchased, new facilities provided and new products launched. Reserves must be created to
provide for adverse times. When we operate according to these principles, the stockholders should realize a fair return.
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 Normative Ethical Theories: 3 approaches
for examining the ethical nature of a decision

1. Utilitarianism (consequences)
2. Deontology (means, actions)
3. Virtue Theory (character)

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 Alternate Business Ethics Textbook, Chapter 11:
Business Ethics in an Evolving Environment
• Formation of conscience takes place over time.
• The path to doing the “right thing” becomes easier over time.
• Government policy vs. a multinational corporation’s global ethical standards.
• Relationships matter
• The right “fit”
• Money?
• Ethical top leadership

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 Values and Personal Mission Statement

• Personal code of behavior

• What are your core values?
• Translate into your personal mission statement
• (See handout for Class Exercise assignment.)

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 Giving Voice to Values

• ….a different way of thinking

• Starting premise: Most of us want to act on our values AND want to feel like we
have a reasonable chance of doing so effectively and successfully.
• Research on core values – commonalities across cultures (Kidder, Seligman)
• Research – GVV: Acting on values is context-specific, particularly across cultures
(Gentile)

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 Giving Voice to Values – Starting Assumptions
1. I want to do this.
2. I have done this.
3. I can do this more and better.
4. It is easier for me to do this in some contexts.
5. I am more likely to do this if I have practiced how to resond.
6. My example is powerful.
7. Mastering responses to frequently heard rationalizations can empower others to act.
8. The better I know myself, the more I can prepare to play to my strengths and protect myself from my
weaknesses.
9. I am not alone.
10. Voicing and acting on my values is worth doing, although I might not always succeed.
11. Voicing my values leads to better decisions.
12. The more I believe it’s possible, the more likely I will be able to do this.

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 The 7 Pillars of Giving Voice to Values (GVV)
1. Values
2. Choice
3. Normalization
4. Purpose
5. Self-Knowledge, Self-Image & Alignment
6. Voice
7. Reasons & Rationalization

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Giving Voice to Values – In class practice.
Convene in Small Groups (3) & Take Notes
Practice #1
• Each person share their story of when you DID act on values.
• Feel free to ask follow up questions about impact, motivation, satisfaction and possible
enablers in/out of your control.
• What are some similarities, differences or potential generalizations you see?
Practice #2
• Consider the 2nd story – the time where you DID NOT voice your values.
• You don’t need to actually share the story, but focus your comments on why the outcome was
different. Why didn’t you voice and act upon your values? What was different about
motivation, satisfaction and possible enablers?
• Knowing what enabled you (and group members) to voice your values in the first stories, what
might you be able to do to change the outcome in the 2nd story if faced with such a situation
again.
The University of Akron - Management Principles & Concepts
 Class Exercise: Ethics/Giving Voice to Values
application/Mission Statement (see Brightspace
Module 5 for detailed instructions).
1. Consider where you DID act on your values.
2. Consider where you DID NOT act on your values.
3. Think about both – what enabled you to speak up.
4. Which enables from your DID act example might you use in the future if the DID
NOT situation were to occur again?
5. Reflect on your PURPOSE.
6. Reflect on your SELF-IMAGE.
7. Compose your personal MISSION STATEMENT.

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